10/12/2017 9:31AM

Zoccali: The horse shortage situation is real

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At the first session of the Lexington Selected yearling sale, we saw quite a different model for purchasing yearlings than we witnessed just one year ago.

It would have been nearly impossible for the average yearling price to increase year over year, given that there were three horses which were purchased for a combined $1.8 Million at the top-end of the sale in 2016.  Last year, the strength was clearly at the top-end of the market, while last night, the story was the middle-tier yearlings that sold.

Despite the monstrous purchases at the top-end of the sale last year on the opening session, the median yearling price was $90,000.  Last night, that number moved up to $100,000.  This makes sense because if buyers are not emptying their wallets on just a handful of horses, they can spread their purchase power more efficiently throughout the rest of the yearlings, thus driving the median price higher.

What does this mean for harness racing?  That’s tough to answer after just one night.  But let’s try to put it into perspective.  It means that as we emphasize the importance of these sales as a measuring stick for the health of the harness racing industry, we are subconsciously heading toward an age of harness racing where there are “centers of excellence” for younger, talented horses and “overnight racing” becomes a thing of the past.  This is because between the ages of two and four, 30 to 40 percent of the registered foals make it onto the racetrack, but by a foal crops’ 6-year-old season, only 15 percent remain and two years after that, the number falls into the single digits.

During my time at The Meadowlands I performed an analysis that projected the total starters by age of horse for the next 10 years.  I used the number of foals each year and proportionally applied the number of starters from each foal crop that remains on the racetrack.  The chart looks like this.

The chart has also been updated with data that can be found in the 2016 U.S.T.A. Annual Report here: http://xwebapp.ustrotting.com/absolutenm/articlefiles/68430-Annual%20Meeting%202016finala.pdf

Lastly, I projected out the next several years’ foal crops based on the trends of the last 15 years as follows:

2017 7034
2018 6804
2019 6581
2020 6366
2021 6158
2022 5956
2023 5761
2024 5573

 

 

 

 

 

 

 

 

 

 

Essentially, what we need to know is this: In the year 2020 there will be 7,000 fewer Standardbreds on the racetrack in North America than there were in 2015.  Furthermore, the meat and potatoes of the horses that will make up the overnight horse population (between ages four and nine) in 2020 will be numbered at just 6,500 on this entire continent, compared to 10,582 in 2015.  In 2002, there were over 20,000 of those horses competing.  Thus, 60-percent of the decrease in horse population will be those horses that are filling up overnight cards on a daily basis.  That is a major problem for the industry.

In discussing this analysis with Jeff Gural and Jason Settlemoir, my opinion was that by 2017 racetracks having to cancel overnight programs due to insufficient entries would become a more common occurrence and the problem would only worsen with each passing year.  They both agreed with this viewpoint and Jason included the horse shortage as a focal-point of his campaign for Presidency of the U.S.T.A.

What does this have to do with the Lexington-Selected yearling sale?  To be blunt, the success of Tuesday’s opening session in terms of how it performed against last year, or the year before that, will have little to no impact on the health of this industry going forward.  I would hope the sale would continue to show noticeable increases as the supply of horses continues to wane, but the fact that is not even happening shows that the demand is not there either.

While an industry turns to Lexington Kentucky this week and spends millions of dollars on the stars of tomorrow, I am here to tell you that it doesn’t matter, because this industry is running out of tomorrows.  Regardless of how many yearlings sell for six-figures, regardless of how it compares to last year, it has nothing to do with the fact that in three years’ time, the landscape of harness racing, by sheer mathematical fact, will be contracted, in some instances, severely contracted.

Here is an example:  The Meadowlands, Mohawk, Mohegan Sun at Pocono Downs, Harrah’s Philadelphia and Yonkers Raceway require a combined 2,100 overnight horses per week to fill their racing programs.  In just a little over two years’ time, there will be approximately 6,500 overnight horses in training on this entire continent and nearly 33 percent of those horses will be needed to fill races at five racetracks . . . five.  This doesn’t include the other six standardbred tracks in New York, or any of the standardbred tracks in Ohio, Indiana, Delaware, or any other track in Canada besides Mohawk.

If this scares you, then I have done my job, because as we are watching the cream of the crop stroll through the sales rings in Lexington, I am here to tell you that there is a bad moon rising.  Admittedly, I am no longer as in-tune in the harness racing industry as I was during my time at The Meadowlands and I do not know what conversations are taking place on this subject, but these numbers are real and if they aren’t addressed soon, not only will the Lexington-Selected yearling sale no longer matter, but it may no longer exist, either.